Only 2% market share in China, why Samsung fell out of favor?


Once the dominant smartphone company in China, Samsung Electronics fell to the bottom of the list of major smartphone brands, with just over 2% market share there.

According to Chinese newspapers South China Morning PostWith Samsung holding 20% ​​market share in China five years ago, the current situation can be said that Samsung has been disgraced, completely failed to conquer Chinese consumers.

The Galaxy Note 7 recall due to battery problems in October 2016, the rapid rise of Chinese brands, and the political collapse of the controversy between Seoul and Beijing, all joined forces. the “knock out” part of Samsung in China.

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To regain market share, Samsung teamed up with two of China’s most famous young actors, Zhou Yawen (Zhu Yawen) and Chengyan (Jing Boran), to build a celebrity image that backs the Galaxy S9.

According to James Yan, research director at Counterpoint Technology in Beijing, Samsung’s poor performance in the Chinese market over the past few years is due to its inability to keep up with users’ requests, while others Direct competitors proved to be very proactive and even predictable such requests.

The decline of Samsung in China is in stark contrast to the growth of domestic brands such as Huawei Technologies, Xiaomi, Oppo and Vivo, which currently account for 87% of the domestic market share. Apple, even if it failed, also holds itself 8% market share here.

Samsung declined to comment specifically on its strategy in China, saying only in an emailed statement “Samsung’s strategy in this competitive marketplace is to listen to its customers and deliver innovations that meet their unique needs.”

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In the past two years, no Samsung smartphone has made it into the list of the 10 best-selling phones in China. According to analysis by research firm Strategy Analytics, Samsung’s market share fell to an estimated 1.6% in the fourth quarter of last year from 2.2% in the third quarter. In 2013, the Korean brand was at No. 1 with 20% – considered the leader in technology and design among Chinese youth.

According to interviews with Samsung users in the past, it can be seen that Samsung needs a lot of things to regain the trust of Chinese users, not just new smartphones.

“I gave up my Samsung phone because it started running slowly after a year of use. Sometimes it even stops working completely”, The restaurant manager Lily Du, 38, has already used a Galaxy S7 but has switched to Xiaomi and Huawei phones for personal use. “I don’t see Samsung making any effort to please Chinese buyers.”

Samsung’s weak localization efforts left users like Lily Du unhappy. For example, although the cameras on Galaxy phones produce very good quality photos, the company proved too slow to meet the need of “automatic beauty” when taking selfies.

Lily Du is also dissatisfied with the phone’s battery life, as she has to charge it twice a day. Nowadays, her friends and family, both young and old, rarely want to buy Samsung phones.

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Samsung’s flagship smartphone, the Galaxy S9, has video and audio apps designed to appeal to an audience of teenagers proficient in social media, including Chinese users. The S9’s camera can turn selfies into fun, personality and slow-motion videos, but this feature is also available on Huawei’s high-end phones.

“Samsung S9 seems to be a very promising device and has some innovative technology, especially the more advanced camera and new stereo feature”, Forrester analyst Thomas Husson said. “With the growing importance of streaming audio and video, this is definitely a feature that consumers will appreciate.”

Husson believes, however, that Samsung will have to find a way to position new phones with target users willing to pay big sums of money to buy smartphones – and certainly not competitors in China.

“Opportunities with Samsung are limited because I think Huawei will launch a new, differentiated flagship using more advanced AI technologies and more aggressive pricing”he said.

“To win, Samsung must accelerate the transition in content, services, software innovation and collaboration.”

Chinese consumers like Lily Du now have a ton of new domestic phone options, as they optimize the operating system for local users. At the high end, there will be Huawei Mate 10 and Apple’s iPhoneX, while in the mid and low end there will be Oppo R11 and the Xiaomi Note series.

Domestic brands have a deep understanding of the needs of Chinese consumers, like taking selfies and wefie, or enjoying playing mobile games. Oppo’s marketing campaign for the selfie function on Oppo smartphones called “Now, it’s Clear”, is everywhere in middle and high school cities, making the Oppo R11 flagship smartphone popular across China. .

The risk of battery explosion on the Note 7 model is also a turning point for Samsung’s destiny in China, deeply damaging the company’s reputation. Subsequently, political struggles over Seoul’s support for the US missile defense system, also prompted Beijing to encourage a boycott of Korean products.

According to IDC data, Samsung retained its leading position in the world with 22% market share last year, surpassing Apple’s 15%, despite poor performance in the world’s largest smartphone market.

Royal Orchid
* Source: VnReview

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